Section RE 5 — Income Tax Act 2007: No withholding obligation in certain circumstances

RE 5 No withholding obligation in certain circumstances When this section applies (1) This section applies when a person ( person A )— (a) pays an amount to another person ( person B ); or (b) receives a payment while acting as agent or bare trustee for person B. No obligation if person B exempt (2) For the purposes of determining whether person A is required under section RE 4 to withhold RWT, the payment is treated as not consisting of resident passive income if person A has established that person B holds an RWT exemption certificate issued under section RE 27 . No obligation if person B transitional resident (3) If person A receives an amount of resident passive income while acting as agent or bare trustee for person B, they are not required to withhold RWT in relation to the amount when— (a) person B notifies person A that— (i) they are a transitional resident for a period; and (ii) an amount paid during the period from a particular source is exempt income of person B under section CW 27 (Certain income derived by transitional resident); and (b) person A receives the payment during the period from the particular source; and (c) person A has no reasonable grounds for believing that the payment is not exempt income of person B under section CW 27 . Defined in this Act: amount , exempt income , notify , pay , resident passive income , RWT , RWT exemption certificate , transitional resident , trustee , Compare: 2004 No 35 s NF 2(7), (7B)